Shanghai is poised for a resurgence in the retail sector as the city gears up to welcome a wave of new shopping mall openings in 2023. The Shanghai Council of Shopping Centers has reported that as many as 45 new malls, with a combined space of over 3 million square meters, are set to open this year. This represents the largest number of new openings in the past three years and is a clear indication of renewed confidence in the local economy and the recovery of consumer demand.
These new additions will bring the total number of shopping malls in the metropolis to over 400, which will further intensify competition within the retail sector. Operators of these new malls will need to constantly upgrade and innovate their products and services to stay ahead of the game and meet the latest consumption trends and consumer demands.
According to Huang Zhen, head of retail for real estate service provider JLL East China, leasing activity is likely to pick up this year as daily life and business return to normal. However, he also noted that occupancy rates and rents in non-core business districts may continue to be impacted as there is pent-up supply delayed from 2022.
Despite the challenges of the past year, the report predicts that people’s willingness to consume and the number of tourists are expected to gradually recover. Traditional business areas, such as Nanjing East Road, are expected to benefit from the recovery of the tourism sector.
While the COVID-19 pandemic had a significant impact on shopping centers in Shanghai, the sector is likely to see a leasing recovery this year, especially in luxury goods, skin care, new energy vehicles, and outdoor and sports equipment. The gradual release of pent-up consumption is expected to drive a demand rebound for prime retail properties nationwide, and major Chinese cities are projected to welcome more than 8 million square meters of high-quality new retail supply in 2023.
The municipal government of Shanghai has released an action plan aimed at stabilizing expectations, shoring up confidence, and promoting high-quality development. The plan includes consumer incentives such as a 10,000-yuan subsidy for electric vehicle purchases by the end of June, and a 10 percent discount for buyers of green and smart home appliances. With these initiatives and the influx of new shopping malls, Shanghai’s retail sector is poised for a strong rebound in 2023.